VZCZCXRO7490
PP RUEHDA
DE RUEHAK #1086 1641205
ZNR UUUUU ZZH
P 121205Z JUN 08
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 6545
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHIT/AMCONSUL ISTANBUL PRIORITY 4337
RUEHDA/AMCONSUL ADANA PRIORITY 3006

UNCLAS ANKARA 001086 
 
DEPT FOR EEB/IFD/OIA - HGOETHERT, KBUTLER AND L/CID - GSWINEY, 
CHOLLAND 
DEPT PASS USTR 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV KIDE OPIC PGOV CASC TU
SUBJECT: TURKEY: 2008 REPORT ON EXPROPRIATION AND INVESTMENT 
DISPUTES 
 
REF:  STATE 43784 
 
¶1.  The following is Embassy Ankara's submission for the 2008 report 
to the U.S. Congress on expropriation claims and investment 
disputes, providing an update on the two ongoing cases reported in 
¶2007. 
 
¶2.  Claimant Data: 
 
-- Claimants A are Victor and Kristy Bedoian, both U.S. citizens. 
They filed a Privacy Act Waiver in 2001.  Victor Bedoian told us 
that he "technically" has a 95 percent share in the Turkish company 
owning the real estate in dispute, but that there are also six other 
partners in the venture. 
 
-- Claimants C are U.S. companies with build-operate-transfer (BOT) 
and transfer-of-operating-rights (TOR) contracts in dispute 
(company, location, value of contract in USD millions): 
 
  C1. AES (BOT project), Eskisehir, 165, Gas-fired Power Plant 
 
  C2. GE (BOT project), Atam Elektrik, 195, Gas-fired Power Plant 
 
  C3. NRG (TOR project), Seyitomer, 200, Coal-fired Power Plant 
 
  C4. NRG (TOR project), Kangal, 125, Coal-fired Power Plant 
 
¶3.  Begin text of 2007 Report: 
 
The United States is aware of two claims of U.S. persons against the 
Government of Turkey. 
 
¶1. a) Claimants A 
 
b) 2001 
 
c) Claimants A purchased and renovated a hotel and restaurant in Van 
for approximately $750,000 in 2001.  Claimants A had been unable to 
operate their property, however, due to persistent police harassment 
and obstruction by local government authorities. In 2004, 
administrative courts decided against Claimants A in their suit to 
obtain a residence permit and an operating permit for the hotel. In 
early 2005, a Van court dismissed a civil case initiated by 
Claimants A, in which they sought to annul the transfer of title to 
a hotel which they claim was sold without their knowledge or 
consent.  In September 2005, Claimants A lost their appeal of the 
decision in the civil case in the Turkish courts, which was upheld 
by the court in Van in February 2006.  This was their last option 
for appeal in the Turkish legal system.  They have now started the 
process to appeal this decision under a "cancellation of rights" 
case at the European Court of Human Rights, in which they have also 
appealed the permit decisions.  As of June 2008, the claimants have 
still not received a response from the European Court of Human 
Rights regarding their petition, and we understand that they remain 
in the United States. 
 
 
¶3. a)  Claimants C 
 
b)  2000 - 2001 
 
c)  In 2001, the Turkish Government cancelled 46 contracted (but not 
yet built) power projects based on the build-operate-transfer (BOT) 
and transfer-of-operating-rights (TOR) models.  Turkey's 
constitutional court ruled in 2002 that the Turkish Government must 
either honor the contracts or compensate the companies involved. 
Claimant C4 filed an international arbitration case with the 
International Chamber of Commerce (ICC), which ruled in favor of the 
company but did not include any financial compensation.  Claimants 
C1 - C3 did not apply to arbitration for their disputes.  The 
Turkish partners of C1 and C2 chose to pursue arbitration and won 
their case.  Since no U.S. firms chose to pursue further legal 
action, post considers these cases settled and will not include it 
in future reports. 
 
Wilson